1. Field of the Invention
This invention generally relates to data processing and, more particularly, to electronic negotiation using trading, matching, and/or bidding.
2. Description of the Related Art
Traditional procurement utilizes decades-old, mature processes. Traditional procurement efforts utilize a “Request for Quote” procedure. That is, when a buyer wants to purchase goods and/or services, the buyer issues a Request for Quote (sometimes known by the acronym “RFQ” or perhaps “Request for Proposal”) to one or more suppliers. The buyer then sends the RFQ to each supplier, awaits their responses, and then awards business to a final supplier. The traditional procurement RFQ process might require weeks, or even months, of effort before a supplier was chosen.
Nowadays, however, buyers are beginning to utilize online, reverse auctions as a sourcing tool. The buyer of goods and/or services typically utilizes the Internet to conduct a real-time, dynamic auction between the buyer and a group of suppliers. Each supplier submits a bid in the hope of winning the auctioned business. Because the online, reverse auction stimulates competition, many buyers are able to reduce the costs of purchased goods and services. As buyers have discovered, the auction bidding process can incite competition and even create a frenzy of bidding, thus lowering the costs of purchased goods/services below that previously obtained through the traditional sourcing process.
Many procurement personnel, however, are unfamiliar with reverse auction concepts and strategies. Because the traditional RFQ sourcing process is decades-old, many people and businesses may be reluctant to adopt new auction practices. Despite the potential savings offered by these new auction practices, many people and companies may be reluctant to tackle the learning curve. There is, accordingly, a need in the art for an easy-to-use procurement tool that teaches a user how to structure an online, reverse auction. There is also a need in the art for a procurement tool that teaches a user how to strategically optimize the design of the auction to optimize the expected outcome.